Snyder v. Scott

Decided December 7, 1934

Supreme Court of South Carolina · decided 1934-12-07

Decided 1934-12-07

¶1 The opinion of the Court was delivered by

Mr. Justice Stabler.

¶2 Por the reasons stated by his Honor, Judge Greene, in his decree, which will be reported, the judgment of the Circuit Court is affirmed.

Messrs. Justices Carter and Bonham and Messrs. G. Dewey Oxner and A. D. Gaston, Acting Associate Justices, concur.

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Case posture

Posture: Before GREEN, J., Greenville, March, 1931. Affirmed.Proceeding by J.M. Wells, receiver, and others in the matter of Ola Snyder, by her guardian ad litem T.G. Snyder, and another, against Mrs. Fannie C. Scott and others, wherein certain claimants were respondents. From an adverse decree, plaintiffs appeal. The decree of Judge Greene and the report of E. Inman, Master, follow: DECREE OF JUDGE GREENE This case comes before me upon exceptions to the Master's report and I have heard arguments thereon of counsel representing the receiver and Guy A. Gullick, Esq., the present Judge of Probate for Greenville County, and certain other claimants, who contend that they are preferred over other classes of claimants. The facts out of which the questions presented to the Court for determination have arisen, may be stated briefly as follows: Mrs. Fannie C. Scott, who was Probate Judge for Greenville County for a number of years, appears to have received during her terms of office from various sources the total sum of $38,575.15, and she invested most of these funds in real estate mortgages, After she vacated the office and the present Probate Judge, Guy A. Gullick, Esq., assumed the duties of the office as her successor, an action was brought by the plaintiff against the said Fannie C. Scott and the surety company to which Guy A. Gullick, Esq., as Probate Judge, was made a party, alleging that Mrs. Scott had carelessly invested the money in her hands and that there would be a substantial loss on account of her negligence in the investment of the funds of her office, and that consequently she was personally liable, and that her surety on her official bond was likewise liable for any loss that might result from her negligent conduct of the office. A receiver was appointed by the Court to take charge of the funds and securities of the office, and he was directed by the Court to liquidate the assets. Subsequently thereto a compromise settlement was made between the receiver, J.M. Wells, Esq., and the United States Fidelity Guaranty Company, the surety on Mrs. Scott's bond. In the settlement, the surety paid to the receiver the sum of $12,000.00 in full settlement of all claims or demands whatsoever against it and the surety thereupon was released and discharged from further liability on said bond. Certain costs and attorney's fees have been paid by the receiver under order of the Court out of the funds collected by him from the surety company, but the amounts paid apparently are not in the record. However, this data or information is not necessary for the determination of the questions presented to me. I have given this case very careful consideration. At the conclusion of the arguments of counsel, I was inclined to think that the Master was in error in holding that any of these claimants were entitled to priority over the others, but, after more mature consideration and reviewing the authorities cited by him, I have reached the conclusion that his findings and conclusions are supported by the decisions of our Supreme Court. It is conceded that the official bond of Mrs. Scott was liable for all funds received by her as public guardian and also in all cases where she received funds from the sale of real estate by her in aid of assets to pay debts of decedents, whether the surplus proceeds of sale were held by her for minors or for persons sui juris . It was the duty of the Probate Judge under the law to receive these funds in her official capacity, and there can be no doubt whatever that the surety on her bond was liable for any default on her part in the handling of these classes of funds. Section 8623, Code of Laws of 1932, provides that a Judge of Probate appointed as public guardian and his sureties shall be liable on his official bond for funds received by him for minors, idiots, and lunatics. Also the case of State ex rel Elliott v. Jeter , 59 S.C. 483 , 38 S.E., 124 , holds that the sureties on the official bond of a Probate Judge are liable for funds received by him in his official character where it was the duty under the law to receive funds. The law provides that, when the personal property is insufficient to pay the debts of a decedent, the real estate shall be sold by the Probate Judge in aid of assets to pay debts, and the law has imposed upon him or her the duty in such cases to sell the real estate and to receive the proceeds from the sale and turn it over to the administrator or executor, and it is obvious that, if Mrs. Scott received these funds and there was any loss in consequence thereof, that she was liable on her bond and that her surety was bound to make good any loss that might occur. I have been unable to find any law in this State requiring or permitting an executor, administrator, or general guardian to deposit with the Probate Judge, or any law authorizing the Probate Judge to receive, any funds so as to relieve the fiduciary from his personal liability or to make the Probate Judge liable under his official bond therefor. Section 3045, Code of Laws of 1932, provides the form of bond of public officers in this State, and one of the conditions is that he or she shall well and truly perform the duties of said office, as now or hereafter required by law, during the whole period he may continue in said office, etc. If the bond of public officers in this State, and one of the conditions where the officer fails to perform the duties of his office required by law. The cases cited by counsel for the receiver appear to be where an officer negligently fails to discharge some duty imposed upon him under the law. These cases seem to me not to be applicable to the facts in this case. There is quite a distinction between the failure or neglect of a public official to discharge some duty imposed upon him by the law and where he acts without any authority of the law. In the former case his bond is liable and in the latter it is not. The case of Wieters v. May et al. , 71 S.C. 14 ,, states the rule very clearly as follows: The bond cannot cover any act or omission of a constable done without any authority of law whatever, or in his private or personal capacity as man or citizen, but it protects alone for what he does or omits to do unlawfully in the execution of his office or some official duty imposed by law. There being no statutory law in this State authorizing or permitting Mrs. Scott to receive in her official capacity these funds from administrators, executors, or guardians, she acted without any authority of law, and I hold that her official bond is not liable therefor. It is therefore ordered and adjudged that all of the exceptions to the Master's report be, and the same are hereby, overruled, and the report of the Master be, and the same is hereby, confirmed in every respect. It is further ordered and adjudged that the receiver, J. M. Wells, Esq., do pay any costs that may have accrued in this proceeding and that he next pay in full all claimants coming within Classes 1, 2a, and 2b as set forth in the report of the Master, out of any funds in his hands, and that he next pay all other claimants their pro rate share equally in the remainder. MASTER'S REPORT I have heretofore filed a report in this case, and the facts are fully stated therein and need not be repeated. In that report there were seven different classes of claimants set forth therein as follows: Class 1. Funds received by the Probate Judge as a regularly appointed public guardian. Class 2a. Funds received by the Probate Judge from the sale of real estate in aid of assets and held by the Probate Court for credit to the accounts of minors. Class 2b. Funds received by the Probate Judge from sale of real estate in aid of assets and held for parties sui juris who were absent and could not be located, and did not call for the money. Class 3a. Funds received by the Probate Court when an administrator, executor, or guardian petitioned for a discharge and paid the money in to the Court for a person sui Class 3b. Funds received by the Probate Court when an administrator, executor, or guardian petitioned for a discharge and paid the money into the Court for a person sui juris . Class 4. Funds received by the Probate Judge on behalf of minors without any order or process of Court authorizing the payment of this money. Class 5. Funds received by the Probate Judge and identified with a particular deposit, loan, or investment and thus kept from the remainder of the assets. The present Probate Judge has filed petitions on behalf of all those claimants coming within Classes 1, 2a, and 2b, and he contends that they are entitled to priority over all claimants within Classes 3a, and 3b, and 4. Claimants coming within the last class need not be considered for the reason that the funds within this class were received by the former Probate Judge and kept separate from the other assets of the office; in other words, that they were so earmarked that they could clearly be identified. Consequently these claimants in that class are entitled to the particular deposit, loan, or investment so identified. No question has been raised as to the priority of the claimants in this class, but counsel for the receiver deny that claimants in Classes 1, 2a, and 2b are entitled to any priority over the claimants in the other classes, and their argument is that all claimants should share equally in the distribution of the funds in the hands of the receiver. This is the sole question for my determination at this time. Section 3045, Code of Laws, 1932, provides the form of bonds for all public officers, and the condition of the bond is that the officer elected or appointed, as the case may be, shall well and truly perform the duties of said office, as now or hereafter required by law, during the whole period he may continue in said office, etc. It seems to me clear from the decisions of our Court that the bond is only intended to cover such cases as where the officer fails to discharge or perform the duties of his office as may be required by the law. There is no statutory law in this State which has been cited or called to my attention requiring or providing for an executor, administrator, or general guardian to turn over any funds to the Probate Judge or authorizing him to receive the same so as to relieve the fiduciary from his liability or to make the Probate Judge liable under his official bond therefor. There can be no doubt that the Probate Judge would be personally liable for any funds paid or received by him without authority of law, but, where he has no authority to accept the funds under the law, then there is no liability whatever created under the terms of his bond. Mr. Justice Jones, speaking for the Court in the case of Wieters v. May et al. , 71 S.C. 14 , 50 S.E., 547 , 548 , stated the rule as follows: The bond cannot cover any act or omission of a constable done without any authority of law whatever, or in his private or personal capacity as man or citizen, but it protects alone for what he does or omits to do unlawfully in the execution of his office or some official duty imposed by law. And the Court went on and cited several cases in this State to sustain that rule. In the case of State v. Executors of Joseph Baskin , and State v. Lewis G. Patterson , 1 Strob., 35, the Court held. The sureties of an Ordinary are not liable for money unlawfully received and wasted by him, and in this same case the Court held, The sureties of an Ordinary are liable for his neglect to take the bond prescribed by the Act of 1839. In not doing so he fails `well and truly to perform the duties of his said office,' thereby recognizing the distinction, which I am attempting to show between a public official's failure or neglect to discharge some duty imposed upon him by law and where he does something that he had no authority whatever under the law to do. In the first case his bond would be liable, but in the last it would not be. Again in the case of State v. John White et al. , 10 Rich. Law, 442, it was held that sureties on bonds of an ordinary are not liable for funds received by him without authority of law. That case appears to me to be so clearly in point that I quote the syllabus: Where a fund, being in the hands of an Ordinary, under a mistaken notice as to his right to receive and hold it officially, was paid over to his successor, who threatened suit unless it was paid over: Held, That the sureties of the successor, he having wasted the fund, were not liable for it. In the case of Allen v. Ramey , 4 Strob., 30, the Court held that the sureties on a sheriff's bond were not liable for printer's fees which the sheriff collected or failed to collect and refused or neglected to pay over on the ground that it was not the official duty of a sheriff to collect such fees of a printer; it being a matter of private contract between the sheriff as an individual and the printer. In the case of Treasurers v. Buckner , 2 McMul., 327, the Court held: Where a sheriff has no process giving him authority to receive, a person who pays to his deputy cannot look to him; Chiles v. Holloway , 4 McCord, 164; and if one, deceived by no show of authority, should pay to J.S., himself, then being sheriff, that which a sheriff had not authority to receive, his recourse would be to J.S., personally, and not to the sheriff's bond. But where a sheriff, having writs which authorize him to collect, exacts from the debtor more than can lawfully be required, even without levy the payment is not voluntary; Levy v. Roberts , 1 McCord, 395; Murray v. Moorer , Cheves, 113; and the sheriff either wilfully abuses his office, or negligently or unskillfully performs his duty, so as to violate the condition of his official bond. The case of State ex rel. Elliott v. Jeter , 59 S.C. 483 , 38 S.E., 124 , 125 , which has not been overruled so far as I can find, appears to me to settle this question, for in that case it was held that sureties on an official bond of a Probate Judge were not liable for funds coming into his hands from sales in partition made subsequent to November 27, 1878, for the reason that the Probate Court had no jurisdiction to make such sales. Mr. Justice Pope, speaking for the Court, said: We recognize the rule as sound that sureties on the bond of a public official should only be liable for the default of their principal in those cases where it was a duty, under the law, of their principal to receive funds in his official character. The cases cited by counsel for the receiver appear to me not to apply in this case. It is indeed true that where the Probate Judge, or any other public official under bond, fails to discharge the duties of his office as may be required by law, for instance, where he negligently fails to require a good and sufficient bond for an administrator or any other fiduciary, then and in such case the sureties on his bond would become liable ( Williams v. Weeks , 70 S.C. 1 , 48 S.E., 619 ), or, as suggested by Chief Justice Blease in the case of Gullick v. Slaten , 169 S.C. 244 , 168 S.E., 697 , 700 , that Probate Judges might become liable upon their official bonds for failure to properly supervise the conduct of guardians appointed in their Courts, but that is not the case here. The former Probate Judge simply received certain funds without authority of law, and, under the decisions of our Courts, as I construe them, her bond is not liable therefor. If, therefore, the bond of Mrs. Scott was not liable for funds received by her without authority of law, then it necessarily follows that all claimants coming within Classes 1, 2a, and 2b, are entitled to be paid in full out of the funds in the hands of the receiver and all other claimants should share equally in the remainder. All of which is respectfully submitted.

Source: CourtListener

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Supreme Court of South Carolina

Parallel citations

177 S.E 665